Treasurys are getting crushed

US Treasurys are under significant pressure for a second consecutive day. Friday’s selling has yields up 7 to 8 basis points at the long end of the curve with the 10-year yield now at 1.666%, its highest since late June. When bond prices go fall, yields rise.

And BNP Paribas says the selling is likely to continue. In a note sent out to clients on Thursday, the team of Shahid Ladha and Timothy High wrote there are several factors that point to even higher yields and a steeper yield curve in the US.

Those factors include, but are not limited to:

Expectations the consumer price index will climb to 2% by the end of the year, up from 0.8% in July.The market expecting the Fed to remain on hold, which “should allow premia to return in the curve” and limit a downturn in risky assets. Hawkish rhetoric from other central banks could allow for the return of volatility in rates markets.